FCC Chairman Pushes Spectrum Auctions

During a speech earlier this week at the National Association of Regulatory Utility Commissioners (NARUC) Annual Meeting in Atlanta, Ga., FCC Chairman Julius Genachowski appeared to be pushing for an auction of more TV broadcast spectrum.

He observed that during the last century, the FCC, by providing spectrum for television broadcasting had helped to create an "extraordinarily successful U.S. content industry." However, this success was tempered by the reality that the use of this spectrum for broadcasting "makes it harder to do what's necessary in the 21st century."

"Fast forward to today," said Genachowski. "Less than 10 percent of us--down from 100 percent--still get our television programming from over-the-air broadcast transmissions. Instead, people watch TV through cable or satellite. The world has changed, but our spectrum allocations still reflect the previous era. This presents a real obstacle as we try to ensure a spectrum infrastructure for the new world of mobile broadband."

The Chairman fails to acknowledge that the amount of spectrum devoted to broadcast TV is significantly less than it was in the mid-20th century. In addition to the current VHF spectrum, TV broadcasting at one time had UHF spectrum extending from 470 MHz to 890 MHz—a total of 486 MHz of spectrum, including the VHF channels. Then channels 70 to 83 were stripped for cellular telephones in 1983, and last year channels 52-69 were taken away and allocated to public safety or auctioned to wireless services, including services like FLO TV that offered subscription mobile TV services.

Also, while some paint broadcast TV as a dinosaur ready for extinction, they don't recognize that broadcasters have just completed a complex transition to digital TV and now offer better picture quality and more variety, including a large number of specialty and ethnic channels.

Further, recent studies indicate a drop in cable TV subscriptions and an increase in off-air viewing. Every week I see articles advising consumers on how to "cut the cord" and get free TV off-air.

Unfortunately, to free up this desired 120 MHz block of spectrum--whether done voluntarily or not--many program channels will have to disappear, either as a result of channel sharing or surrendering spectrum in the most densely populated areas.

The Chairman's comments also ignore the advances in technology broadcasters have made in developing and rolling out mobile DTV using existing broadcast spectrum and infrastructure. This is not 1950's TV. The standard was adopted slightly more than a year ago and many stations have begun broadcasting mobile DTV, even before mobile DTV receivers are widely available.

Much of the growth in demand for broadband bandwidth is predicted to be for entertainment video. While broadcast TV can't duplicate YouTube (and I hope it never tries), it is, without question, the most efficient way to deliver live content such news, sports and popular entertainment shows. Mobile DTV makes those shows available on the handset or tablet, using one stream to reach thousands or millions rather than one stream (and associated bandwidth) per Internet viewer.

"The concept behind incentive auctions is simple," said Genachowski. "Let's use the power of the free market to ensure underutilized spectrum flows to the uses consumers value most in the 21st century. And to encourage participation--encourage the supply of spectrum for the auction--let's create a mechanism that would allow the license-holder and the American taxpayer to share in the auction revenues. Everybody wins."

Perhaps.

It depends on how the auction is structured. I question how much money the major broadband providers are willing to pay for more spectrum, and what the cost will be for broadcasters who decide not to participate. Ten percent of the population is still a lot of people. They probably won't complain if a channel running endless infomercials goes away, but I'd expect to see a lot of complaints if a local station that has been broadcasting live sports and news events and popular entertainment programming free to the TV in the living room, the portable set in the kitchen--and soon, the TV in the cell phone, netbook, notebook or tablet--becomes a "subscription only" service.

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